The Questions are More Important Than the Answers

Tag Archives: zimbabwe

I wrote this article on 1st January 2015!

The newly minted bond coins released on December 18th, 2014, are facing the challenge of being accepted by consumers who recently experienced hyperinflation of the Zimbabwe Dollar which was legal tender until 2009. The bond coins are pegged at 1:1 to the U.S. Dollar. It means with 100 bond coin cents; you get 1 USD equivalent. If that is the case, why are they being rejected?

First of all, consumers are still smarting from their experience with hyperinflation and this bond coin may be seen as the return of the ZWD despite assurances from the government that this was not the case. Is a hundred bond coins equivalent to 1 bond dollar? Remains to be seen how much the government is trusted in its word.

Secondly, the bond coins are only valid tender within the Zimbabwe borders which means they have to be changed into USD, South African Rand, Botswana Pula or some other forex, if one intends to import goods or go on holiday. If one designed to travel within a few days, they might reject the bond coins preferring other more trusted currencies. Effectively our forex ‘reserves’ are leaving the country where we can spend them thus benefitting the economies of those countries. Even when our shop shelves are stacked with goods, most of them are imported hence the foreign economies benefit. We have a trade deficit which means we import more than we export. As a result of this, we are losing forex inside the country.

This makes the introduction of bond coins suspect. When Gideon Gono was governor, he printed his way out of liquidity challenges and bought forex off the streets to fund import obligations. Because he was spending the forex outside the country, the only way to get more forex was to print more ZWDs.

The question is: will government slowly then quickly mint more bond coins then bond dollars and return to the previous hyperinflationary situation of early 2009? With an economy which is not performing, it’s reasonable to predict such an outcome. We need to produce goods and services to avoid losing money to competitive economies.

The government needs to craft policies that attract local and foreign investment. The current indigenisation policy is vague and political. It has failed to attract investment and must be revised urgently. There seems to be no consensus in government on the need to review the policy. ZimAsset is the government’s ambitious economic blueprint which not only lacks the upwards of USD40 billion funding but is also being implemented by a team which has failed to achieve previous fully funded plans such as ESAP. The 2014/15 budget statement by Patrick Chinamasa was unable to provide funding for the blueprint urging individual ministries to source their funding. With about 90% of the USD4.4 billion budget going to salaries, it’s small wonder the plan remains a pipe dream.

The introduction of the bond coins fails to address real economic challenges and adds to the loss of confidence in the government’s ability to revive our fortunes. It is an embarrassing policy intervention from a governor who has no currency to print his signature.

The euphoria associated with the departure of Robert Mugabe after 37 years as president of Zimbabwe must now translate into real work to make our country great again.

The hard work begins today. Zimbabwe must never be held to ransom by a few individuals in Zanu-PF again. The new leadership going forward must be guided by our constitutional democracy. Rule of law is hard work but it is the only way to avoid a dictatorship.

The multi pronged approach to ouster of Robert Mugabe included the military, the people, and parliament. The army had been captured by Robert Mugabe through a patronage system but turned against him when they felt threatened. The people are not naive to this fact but we have to be pragmatic and politically mature. We have an institutional framework which worked to force Mugabe to resign. Now we should our institutions for building the state of Zimbabwe.

We pride ourselves as one of the most educated countries in Africa but our education has not translated into economic prosperity. This is the time to put our education to good use. Think about how you can make a positive contribution at a personal level.

THE CURIOUS CASE OF NEW POLITICAL PARTIES IN ZIMBABWE
Zimbabwe is not short of creativity. You can point out the economic challenges it is facing but you can’t accuse Zimbabwe of not having enough political parties. We have more than 20 political parties. The new political formations are not happy with the ruling ZANUPF party led by president Robert Mugabe and the main opposition MDC led by Morgan Tsvangirai. ZANUPF is blamed for the current economic malaise and the MDC is accused of failing to take political power after winning elections on several occasions.

I’m curious to understand the thought process behind the formation of a new political party. There’s a lot of work that needs to be done in terms of setting up structures and building a political brand the way the ruling party and the main opposition have done over many years. I don’t understand why aspiring presidents are forming new parties instead of joining the established political formations and adding their fresh ideas in those parties because they already have an established brand. Perhaps the easiest and fastest way to become president is to become the founder of a political party?

It’s also curious to note that as soon as the new political party is formed, it tries to join hands with others in a coalition of many names. A coalition with the same parties that are not good enough to join. Perhaps if the coalition wins the general election, the presidents of each coalition partners is guaranteed a political stake in the new government. Nothing wrong if they can pull it off. Maybe the country will benefit from the many talents putting themselves forward.

Some of the new political parties have not held an elective congress to choose its own leadership let alone participate in a single by-election to gauge their political relevance. Politics is about numbers which the ruling party and main opposition clearly have based on results of previous elections. It’s also about clear ideological positions. I’m struggling to find these in the new formations.

Having said that, I congratulate the men and women who have thrown their hats into the political ring in Zimbabwe. They have done something instead of just ranting about a failed politics. If their objective is to participate in the long-term politics of the country I think they’ve done well but if they want to rule Zimbabwe come 2018 I think they may be too ambitious.

The United Kingdom on Thursday 23rd June 2016, voted to leave the European Union (EU), in a referendum. The leave vote won by a majority 52% to the remain’s 48%. Prime minister David Cameron announced his resignation the day after the referendum, after having campaigned for the losing remain vote. I think the prime minister was too hasty in his decision to step down. Before the vote, he promised to honour the decision of the British people and would immediately invoke article 50 which begins the divorce process. He broke that promise. I think after winning two elections as leader of the Conservatives and stabilising the post-2008 recession economy , he did not want his legacy tainted by the difficulties of a divorce from the single largest common market and military union. He didn’t want to be the prime minister who broke a 43 year old marriage over an in or out referendum which was hijacked by an immigration quarrel. I think it was bad timing for David Cameron to call for this referendum at a time when there is anti immigration sentiment fuelled by the perceived negative effects of globalisation. He should have waited for the Donald Trump experiment in the United States to fail. The presumptive Republican nominee for the 2016 presidential elections has pledged to build a wall on the Mexican boarder and has also threatened to ban immigration from perceived hostile Moslem nations. Most British people considered this referendum as a question of whether or not they support immigration. David Cameron is shocked by the outcome. He should never have reduced a relationship as complex as the European Union to a simple in or out. There are more reasons to stay than to leave.

The leader of the opposition Jeremy Corbyn’s position is also being questioned after supporting and campaigning for the remain camp. He has waded off initial calls for him to resign and a vote of no confidence is being prepared for the week after the Brexit results. He campaigned on the same remain podium as the prime minister so it’s no wonder he is also being asked to take the blame for losing the argument as the prime minister has done. Jeremy has immediately started blaming the Conservatives for neglecting the poor who now perceive immigration as the scapegoat for their challenges.

There are many more political implications of this result. Scotland is putting a second referendum for independence from the United Kingdom back on its agenda after voting to stay in 2014. Scotland voted to stay in the European Union in the Brexit vote, and so it makes sense for them to want to leave the United Kingdom so they can stay in the European Union. Commentators fear a domino effect across Europe for other countries to leave.

There are also economic implications with the pound sterling taking its worst battering against the American dollar since the mid 1980s. The rest of the EU has been thrown into turmoil with Brussels urging the UK to leave as soon as possible. I’m surprised at the eagerness of the European Union to let the United Kingdom leave. I can understand that they are trying to reduce the period of uncertainty as the process will take up to two years to complete after article 50 is invoked. David Cameron has said it is up to the next prime minister to decide on article 50 and this can take up to October when the new conservative leader becomes prime minister. Brussels insists there’s no need to wait for October. They want to reduce the damage the Brexit will cause to the European Union.

However there’s reluctance from leave camp who appear to be shocked they won. They have called for a period of calm and reflection in the immediate aftermath although their campaign was anything but calm. They have also pointed out that the results of the referendum are only advisory and not legally binding. The UK will have more than two years of entanglement from the EU if they invoke article 50 to kickstart the divorce process.

A petition for a second referendum surpassed the 100 000 signatures mark and had more than 3 million signatures.

What does all this mean for Zimbabweans in particular and Africans in general? We have a community of Zimbabweans and Africans most of whom voted to remain against a leave campaign which was run on blaming the EU for the immigration status of the U.K. Immigrants are blamed for taking jobs away from natives. The leave campaign misinformed the public by making the referendum about immigration and ignored the economic and military ties of the U.K. and the EU. They ignored the impact of leaving the single largest common market.

The fall of the pound sterling against the greenback means that in the immediate aftermath of the Brexit, it is now more expensive to remit money to Zimbabwe and to the rest of the African continent. Zimbabwe has been using the United States dollar as its main currency after dumping its own currency in 2008. The Zimbabwean economy has been relying on diaspora remittances including those from the U.K. That means sending less money for Patrick Chinamasa, the finance minister. This will cause more problems for an economy which is already on life support. This is happening at a time the Zimbabwe government is failing to pay civil servants on time and in full. The youth have become more agitated with some calling for vice president Mphoko to vacate his hotel residence where he has been living at the expense of the tax payer for almost 2 years citing a 3.5 million dollar mansion built for him as sub standard. Corruption also continues unchecked and the state has no clue where diamond revenues have disappeared to without trace.

SANCTIONS

Zimbabwe is under sanctions from both the EU and the U.K. The new relationships caused by the Brexit will mean a revisit and review of the sanctions. Zimbabwe will be monitoring proceedings in Europe. Zimbabwe needs to be proactive and not always be reactive. Zimbabwe has claimed revenue losses of more than 40 billion US dollars since the sanctions were put in place. Nobody is sure how they arrived at this figure. The sanctions mantra has been a contentious issue with some saying they were targeted at certain individuals including the president and his inner circle. Most people ask the question how come the sanctions are said to have such a devastating impact yet our biggest trading partner is South Africa and they did not impose sanctions on Zimbabwe. The sanctions did not stop Zimbabwe looking east and forging new economic ties with predominantly the Chinese. However, the policy seems to have yielded nothing and Zimbabwe is back in negotiations with the IMF to reopen lines of credit. Those of in the know of how the IMF works know that this is another opportunity for the IMF to plunge Zimbabwe into more debt which will take generations to repay. Is this the inheritance we want for our children?

GEOPOLITICS

Zimbabwe has to understand the geopolitical implications of the Brexit and how it affects the African continent. Some people have already predicted more British involvement in promoting war on the African continent as their empire building plans have been dented by the Brexit. They may turn back to their old aggressive ways to fight for resources in Africa. Zimbabwe needs to understand how Russia will react as Brexit will reduce the military power of the EU and Britain itself. We should also ask ourselves if the African Union, is doing enough to encourage economic and military cooperation amongst AU member states? Have we done enough to ensure mutual benefit or we just sympathise with a neighbour who is going through a difficult time? How will the United States respond to the challenges the EU is going through?

CAPITAL

Finally, what new opportunities are being presented by the Brexit? Every challenge presents new opportunities and opportunities present new challenges and the cycle continues. We should not be waiting to see what happens, we should be prepared to influence what we want to happen. The turmoil in the money markets made instant millionaires when the pound sterling took a knock then slightly recovered. Those who know how to play the game made their money overnight. Some also lost.

So what do you think Zimbabweans should be doing in the wake of the Brexit? Should they wait and see as usual or be more proactive and what does that mean?

As an African who grew up observing the confusion around belief, I suggest that we question everything and try to seek answers. I don’t care what people want to believe but I think we could cause less confusion to our children if we’re willing to be questioned and to answer their questions. It is not only children who have questions but adults too. Before the white man brought the bible to Africa, we had our own unique spiritual beliefs and rituals (which should also be questioned by the way), but we either replaced them with Christianity or practiced them alongside Christianity. The sad part was the breakup of families who quarrelled about traditional beliefs and Christianity. This conflict is still happening today. Those family members who stayed in the rural areas tried to preserve our traditional beliefs whilst those that migrated to the cities experimented with Christianity.

If you look at Zimbabwe, the different provinces subscribe to different denominations of Protestant Christianity. The Manicaland province is predominantly Methodist and Anglican whilst Masvingo province is Dutch reformed and catholic. The cities are now predominantly Pentecostal although the traditional Christian denominations are in every neighbourhood. I remember one church in North End in Bulawayo which was for whites only. That was strange to me as a kid. Even the church of Scientology has offices in Bulawayo in Zimbabwe. I read that book by L Ron Hubbard because my cousin brother had joined them and brought the book home. So in primary I started questioning this spiritual maze but there was no one to ask without asking for trouble.

Today we are still not comfortable to question our spirituality. We still whether we should marry or bury our dead the traditional or Christian way or both. Why can’t we just question this and agree to disagree?

I always ask this question: if we had been colonised by the Chinese, would we be Bhudhist today? Are we easily influenced by the strong beliefs of others? Sometimes I joke that we’re now more Christian than the white man who introduced us to the bible. Did you know that there’s a book which was written asa guide to make black people Christian? It’s titled ‘How To Make A Negro Christian’ by Dr. Reverend Charles Colcock Jones. It’s available on Amazon.